Illustrate the design a self-selection mechanism


Designing a self-selection mechanism which helps to identify types of investors.

Pelican Point Financial Group's clientele consists of two types of investors. The first type of investor makes may transactions in a given year and has a net worth of over $1 million. These investors seek unlimited access to investment consultants and are willing to pay up to $10,000 annually for not fee-based transactions, or alternatively, $25 per trade. The other type of investor also has a net worth of over $1 million but makes few transactions each year and therefore is willing to pay $100 per trade. As the manager of Pelican Point Financial Group, you are unable to determine whether any given individual is a high or low volume transaction investor. Illustrate the design a self-selection mechanism that permits you to identify each type of investor.

Request for Solution File

Ask an Expert for Answer!!
Business Economics: Illustrate the design a self-selection mechanism
Reference No:- TGS020547

Expected delivery within 24 Hours